Another Director of Hershey’s Controlling Trust Quit

A board member of the charitable trust that controls Hershey Co (HSY) has resigned, the fourth such departure in less than 12 months, the trust said on Monday, at a time when the chocolate company is a takeover target for Mondelez International Inc (MDLZ).

While no explanation for the move was provided, the resignation came as the trust is locked in a bitter dispute with its direct overseer, the Pennsylvania Attorney General’s office, over its governance.

The $12 billion trust, set up by Hershey founder Milton Hershey over a century ago to fund and run a school for underprivileged children, must approve any sale of the company. Its affairs have been in the spotlight since Hershey rejected Mondelez’s $23 billion offer two weeks ago.

Joan Steel, a Hershey trustee, resigned over the weekend, trust spokesman Kent Jarrell said. He did not provide a reason for her resignation, but said the trust’s board would continue to function with its nine remaining members until her replacement is named.

Steel could not be immediately reached for comment.

Hershey shares rose 2 percent after Reuters first reported the news and were trading down 0.6 percent at $110.00 at mid-afternoon in New York. Mondelez’s offer last month, which was half in cash and half in stock, was worth around $107 per share, sources have previously said.

Steel’s departure follows the resignations of Hershey trustees Richard Zilmer, John Fry and Stephanie Bell-Rose over the past year.

Bell-Rose resigned this spring, three months after her appointment, because the position required more time than she had expected and interfered with her responsibilities as senior managing director at TIAA-CREF Financial Services, Jarrell said.

Fry, the president of Drexel University, informed the board earlier this year he was saddened to leave, but that his additional responsibilities at Greater Philadelphia Chamber of Commerce mean he would be unable to fulfill his many responsibilities, Jarrell said.

Zilmer gave no reason for his resignation, Jarrell added.

The attorney general’s office is investigating the trust for excessive spending and allowing board members to overstay their terms. The office has been asking three of the Hershey trustees, Velma Redmond, Joseph Senser and Robert Cavanaugh, to step down because they have exceeded the customary board term limits of 10 years.

Chief Deputy Attorney General Mark Pacella is seeking a voluntary settlement with the trust by the end of July, the Philadelphia Enquirer reported on July 8, citing internal memos. The attorney general’s office could petition the Dauphin County Orphans’ Court to remove board trustees if no settlement is reached.